Housing Benefit: Great Britain in Comparative Perspective

By Kemp, Peter A. | Public Finance and Management, January 1, 2006 | Go to article overview

Housing Benefit: Great Britain in Comparative Perspective


Kemp, Peter A., Public Finance and Management


Abstract

Britain has a relatively unusual housing allowance scheme compared with those in many other countries. It is also one that has experienced many problems and attracted much criticism. The Labour Government is currently introducing a radical reform of the scheme, which aims to tackle its many problems. The purpose of this article is to consider the British scheme and its planned replacement in comparative perspective. It is argued that, although the new scheme will tackle some of the design faults of the current scheme, other difficulties will be left untouched and important problems with the administration of housing benefit will therefore remain. The new scheme will also be unusual by comparison with housing allowances in other countries, but in a different way from the scheme it is due to replace.

Introduction

Along with many other advanced welfare states, Britain has a relatively mature income-related housing allowance scheme. Known as 'housing benefit', it is relatively unusual by international standards (Kemp, 1994). It is also widely recognized within Britain as having many problems that need attention. With these difficulties in mind, the Labour Government is phasing in a radical reform of housing benefit (DWP, 2002). It is currently testing the proposed new scheme, for private tenants only, in a small number of 'pathfinder' local authority areas, with a view to rolling it out nationally for all private tenants on housing benefit in about 2007. A similar reform is likely to be introduced for social housing tenants in due course, but probably modified to take account of the different rent-setting and tenancy allocation mechanisms in that part of the housing market.

The aim of this paper is to examine in comparative perspective the current housing benefit scheme and its planned replacement. The first main section of the article outlines some of the key characteristics of housing allowance schemes. The second highlights several respects in which the British scheme is relatively unusual. The third section discusses some of the main problems of the current housing benefit scheme. The fourth examines the reformed scheme and identifies some issues that would need to be addressed before it could be rolled out to social rented housing. The fifth section considers whether the new local housing allowance moves incomerelated housing support in Britain closer to the schemes that exist in other countries. The final section draws some conclusions.

Housing allowance design

The design of housing allowances varies from one country to another (among those that have them). In general, housing allowance entitlement is a function of three key variables (Kemp, 2000a):

1. resources (income and assets)

2. household composition

3. housing expenditure

The precise definition of each of these three variables varies from one country to another. For example, resources is usually defined to mean income (and in some cases, assets) but this can be gross income, taxable income, or net income (i.e. income after tax and social security contributions). It can refer to current income or income in a previous tax year. Household type often refers simply to household size, but household composition is taken into account in some countries as well. Housing expenditure may refer both to rent and to mortgage payments, but sometimes only the former. Both rent and mortgage payments may be defined in more or less generous ways. Allowances are most commonly calculated on households' actual housing expenditure, but may be based on a notional or standard amount for the area. As Gibb (1995) points out, the former is as an ex post housing allowance and the latter an ex ante allowance.

These three variables are then combined into a formula to determine each household's allowance entitlement. Most housing allowance formulae are variants of the 'housing gap' approach (see Howenstine, 1986) in which entitlement is defined as a proportion of the difference - the gap - between eligible housing expenditure and a minimum contribution that the household must make. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Housing Benefit: Great Britain in Comparative Perspective
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.